Pru 'should merge with Resolution' – papers 24th Oct

PRUDENTIAL’s stockbroker has told the life insurer it should consider a merger with FTSE 100 rival Resolution, according to the Times .

UBS yesterday weighed into deliberations about Prudential’s future as Roger Hill, analyst at UBS, suggested the most likely outcome is the Pru - which has just announced cost-cutting measures at its first-half results - will opt for a slimmed-down UK business focused on annuities.

Hill has suggested the Pru could sell the entire business to a third party for shares in an enlarged group, with such stock distributed to its shareholders, leaving it as a more focused play on international markets.

While Resolution is perhaps not the only possible candidate, it is suggested its track record as a consolidator, makes Resolution “the obvious partner”, the Times continues..

THE ROYAL INSTITUTION of Chartered Surveyors is threatening to pull out of the Government's home information packs plan and has warned the relationship between housing minister Yvette Cooper and the property industry is at an all-time low, according to the Daily Telegraph.

Industry sources have told the Telegraph relations between the DCLG and Rics have soured after it emerged the government unexpectedly made a rival body, the Surveyors and Valuers Accreditation, the first regulator of the home inspectors who will carry out important parts of the packs.

In a letter to Ms Cooper, RICS chief executive, Louis Armstrong, said: "As there has been no opportunity for other potential scheme providers to present their proposals, we have to conclude that your department is not operating a level playing field or acting in the best interests of the consumer."

FORMER ENRON chief executive Jeffrey Skilling was sentenced to 24 years and four months in jail yesterday for masterminding the energy company's web of fraud-riddled financial dealings which collapsed in one of America's biggest corporate scandals, says the Guardian.

Skilling was handed one of the toughest-ever penalties for a white-collar crime, a decision greeted with satisfaction by victims of the company's fall.

He was put under house arrest, fitted with an electronic tag and told he will be transferred to a North Carolina prison as soon as the jail is ready to receive him. He was also ordered to forfeit $45m (£30m), to be distributed to former Enron staff.

REFORMS TO the government's much-criticised tax credit system will cost £300m by 2010, MPs heard last night, continues the Guardian.

Tax officials told the all-party public accounts committee at the same time, however, reforms will also increase entitlement to tax credits by £500m this year.

Paul Gray, acting chairman of the Revenue & Customs, said his department had been hampered in its efforts to combat errors by lack of information, telling the committee of MPs figures at his disposal only related to 2003-04, the first year of tax credit operations, the Revenue - which operates tax credit payments to six million families - has struggled to stay within its £14bn budget set by the Treasury and in July it was revealed that fraud and error in payments was twice as high as previously estimated and cost £1.17bn in the first year.

AND BARCLAYS WILL PAY its outgoing finance director, Naguib Kheraj, £350,000 next year after he has ceased to have a formal role at the high street bank, adds the Telegraph.

Kheraj will work full time for Barclays until June 30 and after that he will be available on a consultancy basis until the end of next year, on a basic annual salary of £700,000 and his full options of £8m.

He will continue to be paid once he has left his full-time role until the end of 2007, unless he takes another job elsewhere.